Enters the market new cryptocurrency
In October, a new currency will appear on the cryptocurrency market - Bitcoin Gold, the extraction of which may be easier than classic Bitcoin. How to be among those who will get it, and what growth potential does it have?
Photo: Alina Sibiryakova for RBC
In October, the cryptocurrency market is expecting a new addition: Bitcoin, the most influential cryptocurrency in the world, may have a younger brother - the Bitcoin Gold (BTG) cryptocurrency.
Its creators plan to hold a so-called fork on October 25, that is, to divide the Bitcoin chains in the blockchain. If everything goes well, BTG will be able to repeat the success of another Bitcoin clone - Bitcoin Cash (BCH), which was also born as a result of a fork that took place in early August, and which, in just a couple of months of its existence, became the fourth most valuable cryptocurrency on the market.
RBC figured out how an investor can get new coins and what their growth potential is.
Blockchain— a distributed database that contains information about all transactions carried out by system participants.
Cryptocurrency— a digital asset created on the basis of this technology.
Mining— a method of mining cryptocurrency, based on providing one’s own computing resources to perform a mathematical task of verifying and carrying out a cryptocurrency transaction.
Bitcoin harvester- a powerful computer for mining, assembled from several video cards (usually from four to eight), a motherboard and a power supply.
Mining farm— a specially equipped room for installing Bitcoin harvesters, as a rule, has its own power supply line and cooling equipment
Cryptocurrency wallet— a special program that allows its owner to access funds recorded in the blockchain.
Fork— changing the source code in the blockchain, making changes to the algorithm for the functioning of the cryptocurrency. There are two varieties: soft fork and hard fork. A soft fork implies not very significant changes in the operation of the cryptocurrency network. During a hard fork, the changes are so significant that the nodes that accepted them seem to separate. For example, the algorithm for confirming transactions is changing. At this moment, the chain of blocks bifurcates: the previous algorithm remains in one, and the new one remains in the second. The old chain will only store information about transactions on its chain. New - information about all transactions that occurred on the main network before the split, and information about your network after the hard fork.
Why do we need a new coin?
This is not the first attempt to create a “new” Bitcoin. Currently, the capitalization of this cryptocurrency is $95 billion. “Watching its success, many people are thinking about creating a similar currency,” says Mikhail Mashchenko, analyst social network for eToro investors in Russia and the CIS.
The crypto community has already discussed the possibility of the emergence of such currencies as Bitcoin XT, Bitcoin Ultimate and Bitcoin Classic. So far, only the experiment with VSN has been successful. The creation of Bitcoin Gold is, as the ideologists of the change say, an attempt to return the cryptocurrency to the status of “digital gold”, which, according to part of the community, Bitcoin has begun to lose. Supporters of the Bitcoin hard fork even began to use slogans such as “Make Bitcoin decentralized again” or simply “Make bitcoin great again,” parodying the slogan of US President Donald Trump during the 2016 election campaign.
The initiator of the Bitcoin hard fork was a team of miners and developers led by Jack Liao, the head of a large mining company from Hong Kong, LightningASIC, which produces the most popular mining equipment under the ASIC brand. “The main idea of the fork is to create an analogue of Bitcoin that can be mined by a larger number of participants, thereby reducing the influence of large mining farms,” explains Pavel Matveev, co-founder of the Wirex cryptobank.
The fact is that now a big role in the market is played by companies that engage in mining on an industrial scale, using expensive equipment that is inaccessible to most. “Currently, several large mining pools that mine currency using ASICs have too much influence on the network and pose a threat,” confirms Mikhail Mashchenko. “Many coins do this - Zcash, Monero, Dash and others. In the future, such an algorithm should have a positive impact on the security of the network,” says Anton Bukov, leading developer of the BitClave blockchain platform.
The creators of Bitcoin Gold want to use a new algorithm that will break the monopoly of factory farms. It will be possible to mine the new coin on standard video processors. “This will make mining accessible to a larger number of participants, and the influence of large companies will accordingly decrease,” explains Tokenbox managing partner Viktor Shpakovsky.
Who will receive BTG
Although there is little time left before the Bitcoin hard fork, there is still no clear understanding in the community of how it will happen. But most experts believe that, as in the case of VSN, new currency everyone who owns the original bitcoin will receive it, regardless of the type of cryptocurrency wallet. “How many original Bitcoins will be in your wallet on October 25, the same number of Bitcoin Gold coins you can get,” predicts Viktor Shpakovsky.
In his opinion, the first to receive the new cryptocurrency will be those investors who store their funds in the wallets of cryptocurrency exchanges that supported the Bitcoin fork (to date, three large exchanges have already announced support for BTG - Bitexchange, Coinbase and Bitstar). “If, for example, you store bitcoins on an exchange that is not going to support BTC Gold, it will be difficult or impossible to receive coins,” Bukov agrees.
As for their own wallets, it is not yet known which of them will be a priority for the fork organizers. “Even those who kept funds in wallets that did not support this cryptocurrency received Bitcoin Cash. In my opinion, the most optimal way is to keep them on a wallet, and not on an exchange, because in the second case you depend on this very exchange. If she doesn’t want to, she won’t credit you with funds,” says Mikhail Mashchenko.
Ultimately, everything depends on the initiators of the fork, concludes Dmitry Dolgov, operating director of the BankEx fintech platform. “Bitcoin cash, for example, can be obtained even now, almost three months after its creation. Perhaps the same will happen with Bitcoin Gold. Or perhaps it will only be issued on October 25th. We will only learn this order during the fork,” he says.
Technically, most likely, BTG will be accrued as follows. If the funds are on the exchange, the owner’s balance will be automatically replenished with new coins. If funds are stored on a cryptocurrency wallet, then it will be possible to display new balance with Bitcoin Gold. “I think that within some time it will be connected to all major devices in any case,” concludes Dmitry Dolgov.
The cost of the future coin is also shrouded in mystery. According to Alexander Boyarintsev, CEO of CryptoFund, Bitcoin Gold may well follow the path of BCH. “That is, the cost will be around $300 per coin at current rate", he believes. According to the founder of the Blockchain.ru project, Dmitry Matsuk, the initial price of Bitcoin Gold could reach $500. The founder of the Universa blockchain, Alexander Borodich, expects rapid growth from the currency. “Immediately after the fork, the exchange rate value of BTG can rise from several hundred to a thousand dollars,” he admits.
According to Pavel Matveev, forecasts are complicated by the fact that the value of the currency can be directly affected by the support of the fork from the mining community. If BTG is cheap (for example, a thousand times cheaper than classic Bitcoin), its demand will be minimal, the expert believes.
But in any case, the new coin will find its investor, experts are sure. “It will be more profitable for miners to mine BTG, so most likely the demand for it will grow,” says Matsuk. First of all, it will be of interest to miners of the cryptocurrency ether (Ethereum, the second most popular cryptocurrency in the world), who use video cards for its mining. “Given that Ethereum will soon undergo changes and a gradual change in the type of mining, it is the miners of the Ethereum network that can switch to Bitcoin Gold mining,” explains Dmitry Matsuk.
Bitcoin has already reacted
The upcoming fork has already contributed to the Bitcoin rate, experts say. Over the past month, the rate of the world's main cryptocurrency has almost doubled. New record was staked on October 12-13: first the coin crossed the threshold of $5 thousand, and then, according to Coindesk and Coinmarketcap, its value rose to $5855, showing a daily increase of more than 20%.
Investors began to transfer their funds to Bitcoin in order to receive BTG coins when divided, experts explain. “Speculators, counting on “free” coins during the hard fork, are buying up bitcoins at full speed, which can lead to an increase in the exchange rate to $6 thousand per coin. And this is far from the limit of the capabilities of the “oldest cryptocurrency,” Mikhail Mashchenko is sure.
However, crypto enthusiasts should not forget that a rise may be followed by a correction, reminds Dmitry Matsuk. “Closer to the hard fork date, the Bitcoin rate may experience downward adjustments, as some speculators will take profits. It is possible that this will happen before October 25,” he predicts.
Bitcoin reacted to the hard fork in August by falling 5% in the first two days, but then rose 20% in just three days. “Keeping in mind the situation with Bitcoin Cash, market participants will likely increase the number of Bitcoins and hold them, as this will allow them to obtain more Bitcoin Gold coins. This could lead to the fact that we will already see a new maximum in the price of Bitcoin,” suggests Viktor Shpakovsky. After the release of a new coin, according to Dmitry Dolgov, the Bitcoin rate may rise, but only slightly.
Mikhail Mashchenko believes that investors should pay attention to Bitcoin in light of the events of the next two months. “Bitcoin has already become expensive, but in any case, if you want to get a new coin, then it makes sense to buy new BTC,” he says. In addition, when Bitcoin Cash appeared, many investors sold it and bought Bitcoin coins in return, which also affected its price. “Perhaps the same thing will happen now: the emergence of Bitcoin Gold will raise the price of Bitcoin,” the expert suggests.
Progress in the cryptocurrency market never ceases to amaze users with its speed and the release of various innovations related to this topic. Competent people have long been hearing about an event that was supposed to take place on October 25, but took place even earlier - the division of Bitcoin and the creation of a new Bitcoin Gold coin. In addition, the new coin may become one of the openings for mining with classic GPU video cards, which are currently used to mine currencies such as Zcash, Ethereum, Monero and others.
In this article we will have to examine a number of issues regarding the new Bitcoin Gold cryptocurrency, its essence, mining capabilities, as well as the details of receiving free coins for users who have classic Bitcoin at their disposal.
What is Bitcoin Gold
Many people have heard about a company engaged in mining farms called Lightning ASIC. Its founder is Chinese businessman Jack Liao. In July 2017, he had the idea to create a project called Bitcoin Gold. The founder intends to improve the original protocol by abandoning the conventional method of mining in the form of ASIC equipment, moving to another stage. The search for Bitcoin coins will be carried out using powerful classic video cards - GPU. The alternative coin Zcash uses the Equihash protocol instead of the original SHA256. The same method will be used to mine Bitcoin Gold. The creators claim that cryptocurrency can only be mined using GPUs. This should definitely attract the attention of many miners.
On the way to his goal, Jack Liao assembled a powerful team consisting of miners and professional developers. A businessman and founder of a Chinese news portal supported the idea and also became Liao’s financial partner. His name is Wubi, and under the username H4x3rotab he is known as an anonymous developer.
Is the new product promising?
The new product has many differences from Bitcoin Cash, despite the creators’ statement that it is a friendly fork. This has its own interests, as Wubi has already explained. The goal of Jack Liao's team is to create a new revolution that can support Bitcoin, and not harm it. The company will also try to make its coin competitive with Bitcoin Cash, Ethereum and other cryptocurrencies mined using the computing power of video cards. The main plans include the task of preserving the Bitcoin ecosystem as a whole.
Subtleties of Bitcoin Gold
As described above, Bitcoin Gold will not use the standard mining algorithm, but Equihash, which will complement Bitcoin. Zcash and Ethereum, which rely on high-performance graphics cards to mine, use the same method instead of ASIC-based software. According to Bitcoin developers, ASIC-based miners are one of the many flaws of Bitcoin at the present time, since Bitcoin is mined and concentrated today in a small number of miners, in to a greater extent from China.
In order to mine Ethereum, a large number of video cards are used around the world. The Ethereum team plans to change the mining method in 2018. Having created its own cryptocurrency, it is possible that Bitcoin Gold will be able to compete with Ethereum, and even outdo its opponent in the near future. At least, this is what the creators of the coin are counting on.
Bitcoin Gold decided to change the algorithm for calculating blocks. A “noise” parameter was created that runs every week, adjusting the difficulty of calculating blocks for miners, after which a reward can be received. Mining power is growing every day and developers must be sure that blocks will be mined at a certain frequency, a block within ten minutes.
Wallets and purchasing Bitcoin Gold
Secret keys from classic BTC wallets (Privat Key) will allow their owners to receive the Bitcoin Gold cryptocurrency. Any wallet that the user uses is suitable for this procedure, but the main thing is to be able to quickly access your personal keys. In addition, on this moment The new coin was supported by several crypto exchanges, so if you have classic Bitcoin on your balance, the exchanges listed below will provide you with the same amount of the new cryptocurrency - BTG. Therefore, if you want to receive Bitcoin Gold credits, and not wait for the weather from the sea, then you should get your bitcoins on one of the proposed exchanges. Full latest information:
Exchanges that will credit Bitcoin Gold tokens if you have bitcoins in your account:
- ▪️HitBTC
▪️Bitexchange
▪️Yobit (already enrolled)
▪️Bittrex
▪️Bitstar
▪️Bitfinex (already credited)
Exchanges that will NOT credit BTG:
- ▪️WEXnz
▪️EXMO
▪️Coinbase
Exchanges that are still undecided:
- ▪️Poloniex
▪️Kraken
▪️Bitbay
Ledger and Tezor wallets will add support for BTG if the code is available and the hard fork occurs with anti-duplicate transaction protection and if it is successful.
Owners of Blockchain info accounts, even if the wallet refuses to credit BTG, will be able to create a private key from the phrase on the wallet that this fork will support (this is the BIP39 standard, which is supported by the entire Bitcoin network).
As for receiving Bitcoin Gold by holders of “cold” wallets like Bitcoin Core, Electrum and others, then the presence of a private key in the wallet is already 99% confirmation that a new coin can be received in the same quantity as those present in the BTC account at the time of the hard fork. Now we just have to wait for the moment when it becomes possible to receive them on the corresponding new wallet, which can be downloaded, as was the case with Bitcoin ABC for the Bitcoin Cash coin, or other alternative options that will definitely be available.
At what price does BTG start and its further trends?
Despite the fact that the Bitcoin Gold hard fork was expected on October 25, a little earlier, namely on October 24 in the morning Moscow time, a snapshot of the blockchain had already taken place on the coveted block 491407, which will probably become memorable for the creators of Bitcoin Gold if the coin becomes successful.
The Bitcoin Gold fork was expected to happen on October 25, but the Bitcoin network reached the specified block a little faster. According to the developers, the network itself will not be launched immediately, but around November 1. At the same time, cryptocurrency mining will also be available.
Regarding the possible price, according to some assumptions, one should expect that the starting price of the cryptocurrency will be around $500. At least on the Yobit exchange, the day before the fork, users were already given cryptocurrency and trading began at 0.12 BTC. The Bitfinex exchange awarded users Bitcoin Gold tokens and the cost of the cryptocurrency was $159.
After the excitement around the new coin subsides, the price will most likely become more logical and correct, although the rate largely depends on further actions developers, including from fulfilling their promise not to put their premine coins up for sale. According to analysts’ expectations, starting from 2018, the currency will gradually be tested and conclusions drawn about its security, demand, and so on. The project is a bit crude and, as many believe, was developed hastily. More than once, Bitcoin Gold developers will have to eliminate vulnerabilities and various problems in their system. By the way, these were also present in Ethereum Classic. And at the time of the fork on October 24, the official website of the cryptocurrency had already been under a DDOS attack for about 5 hours, which indicates competition and interest in the currency.
Bitcoin Gold Growth Prospects
This hard fork is in some ways similar to Bitcoin. Whatever its future in the cryptocurrency market, BTG may well become a backup option to its older brother. It is also possible that a connection with Bitcoin will take place for a number of reasons. For example, if the SegWit2x hard fork carried out in November fails. Jack Liao expressed his positive opinion about joining Bitcoin. But before any global changes occur, serious work will need to be done on the errors in the Bitcoin Gold system. Soon it is planned to release test software for mining and develop a wallet, which does not yet exist.
A lot of criticism was directed at BTG. The cryptocurrency community is alarmed and has a lot of questions about Bitcoin mining. Commenting on the criticism, the creators said that questions about the number of mined blocks are in limbo.
In general, the entire current situation makes it clear that there will be no easy solutions. The creators of Bitcoin Gold will have to refine their system more than once so that it can interest and inspire the confidence of potential users, including the so-called “home miners” who hope to get an expensive coin that has a good price and the possibility of easy mining.
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After recent events that were associated with the introduction of Bitcoin Cash, information has emerged regarding another fork. This will lead to the emergence of the Bitcoin Gold cryptocurrency. The hard fork was scheduled for October 25, 2017. The goal of the developers is to create and release a new protocol that competes with older Bitcoin models. What features does the new hard fork have and is Bitcoin Gold possible to take off?
The project was led by the CEO of the LightningASIC mining company in Hong Kong, Jack Liao. It will be completely separate from the standard circuit. It is planned to activate new tokens on exchanges by November 1, which will exist separately from the original ones.
Developers are making efforts to create a decentralized Bitcoin, through which it will be easier to mine cryptocurrency using graphic cards. Mining will be able to be used by an unlimited number of people.
The new Bitcoin Gold currency involves changing the Proof-of-Work algorithm from SHA256 to Equihash to a new one. It will be ASIC-resistant and optimized for GPU mining. This project has already been criticized by Jang Zhuoer, the head of ViaBTC Hypo Yang. He stated that gold Bitcoin will be insignificant. These are just loud words and it is no longer possible to create a network that will become popular and reduce the influence of major mayors.
Developers' opinion
Jack Liao, who is developing the new algorithm, has until now worked mainly in the direction of Litecoin, but Bitcoin is not alien to him. He cites the example of Bitmain Technologies, which is a unique technology with universal chips and so-called controlled pools.
The new project is posted on its own website, which is not yet fully open to the user’s eyes. We can only view the start page. It remains to wait for the opening of the project. For now, we can only guess what the new blockchain will be like and what specifications will be inherent in him.
It is known that the new network is much smaller and its cost varies within 12% of the price of the original. This is why critics began to argue that this project– nothing more than an attempt to split the main community.
Future plans
Not long ago, the developers of the new project announced that they would hold an ICO. In this case, a condition will be set that provides for deductions in favor of the owner in the amount of 1% of the coins. All information provided was hidden from the eyes of users. Now Bitcoin gold can be mined using video cards.
One way or another, the new hard fork provides for the transfer of free coins to users at the time of division. This fork will be minimal. It will be done in Litecoin style. The developers want to see for themselves how their project will take root in the world of blockchain, and have high hopes for this.
Bitcoin God was last month, Bitcoin Pizza was December 31, 2017, and the release date anonymous Bitcoin Private is still in question. These are just a few of the so-called, when developers clone the Bitcoin codebase and release it under a different name - a new cryptocurrency appears, sometimes with new characteristics. However, often the whole idea of a fork is to benefit from the popularity of Bitcoin.
Some are trying to improve, while others are simply looking for where and how to get quick income. However, the rate of new cryptocurrencies does not always stay at a high level for long.
Last year, there were about 19 Bitcoin forks, but this year there could be another 50, according to Lex Sokolin, director of fintech strategy at Autonomous Research. And with the advent of the Forkgen resource, which allows anyone, even with simple programming skills, to create a fork in just a couple of clicks, there may be even more of them. A couple of weeks ago on Twitter, hedge fund manager Ari Paul predicted that more than 10% of the current value of Bitcoin and Bitcoin Cash would migrate to the new forks.
Unfortunately, most of today's fork-based projects are simply money-hungry, says George Kimionis, chief executive of multi-currency wallet Coinomi. –When we look back later, we will realize that these projects were simply mutations that were stimulated by investors blinded by price growth, rather than honest attempts to contribute to the blockchain ecosystem.
Kimionis predicts that from creating forks, developers may soon move on to their more popular alternative - ICOs, selling new tokens. Last year, the ICO market was crowded, with startups raising about $3.7 billion overall.
The main advantage of the fork is that the new cryptocurrency is created on the basis of Bitcoin, the world's most famous digital currency. In a typical fork, all existing Bitcoin owners are entitled to the forked tokens - new asset can be provided to a huge number of users. Most coins have the word "Bitcoin" in their name to play on the famous name. An example of this is Bitcoin Diamond, whose rate was initially high, but its popularity quickly faded.
“Bitcoin forks are new tokens,” Rhett Creighton, who is now working on the upcoming Bitcoin Private fork, which promises more privacy features, said in a phone interview. – We will soon see a bunch of forks on Bitcoin, and some of them will begin to displace popular cryptocurrencies from the top hundred leaders.
Even some of the first Bitcoin forks are branching: for example, the Bitcoin Cash - Bitcoin Candy fork literally just happened.
Forks also help startups raise funds in countries like China, where ICOs are blocked, said Susan Eustis, director of WinterGreen Research.
Profit from forks
Several years ago, entrepreneurs used the Bitcoin code to launch alternative currencies such as Litecoin and then Dogecoin, differentiating themselves from the mainstream currency not only through a unique name, but also through other characteristics. However market price Dogecoin is worth $770 million, and younger clones Bitcoin Cash and Bitcoin Gold have already surpassed this figure. According to CoinMarketCap, Bitcoin Cash, released in August 2017, is already the fourth largest cryptocurrency with total cost about $28 billion.
Bitcoin Cash has been successful for quite some time, says Charlie Hayter, head of CryptoCompare. “Now other traders are trying to see if they can do the same with new forks.
A fork can often bring in millions for its developers, as well as the mining farm systems that support the new software. Bitcoin Gold pre-mine mined 100,000 tokens, currently worth around $190, to fund the development of its ecosystem. About 5,000 of these coins went to the main team that created the fork. Overall, if the new coins are valuable, it's a very good thing for developers.
Miners, whose computers and servers process cryptocurrency transactions, helped create new coins, hoping to receive a decent reward for it. Bitbank and some Chinese miners proved very helpful when Bitcoin core developer Jeff Garzik created UnitedBitcoin in December. Like many other forks, it could be mined using older hardware that cannot compete with the most modern machines on the Bitcoin network. Therefore, if the price of UnitedBitcoin soars, miners with old equipment that supports it will receive their portion of the profit.
Private miners
Many new forks hope to be acquired by private miners, who have begun to be replaced by industrial server farms. Some forks allow the use of GPUs for mining, meaning that almost anyone with a discrete graphics card in their PC can participate in the process.
“It’s like drilling rigs installed right in the garage,” says Nick Dooley, the main developer of Bitcoin Interest. – Most have discrete graphics or can afford to buy one that will help produce a certain number of tokens.
Support from miners is not always sufficient to maintain the exchange rate. According to a message from the creators, the December fork of SegWit2x (B2X) attracted more than 10,000 miners. But the B2X rate is falling - the currency has already lost more than 90% of its value since December 22.
We give our users choice and let them decide which assets they are going to use and which they are not,” says Coinomi’s Kimionis. “We cannot make such decisions for them.”
The second Bitcoin hard fork may take place on October 25, 2017. As a result of the “split,” a new cryptocurrency called Bitcoin Gold may emerge.
Bitcoin hard fork on October 25
The separation from the original Bitcoin chain is scheduled for October 25, and the new cryptocurrency should appear on exchanges by November 1. The Bitcoin Gold project is led by Jack Liao, head of the Hong Kong mining firm LightningASIC.
The idea of the project, according to its authors, is to create an improved protocol that can compete with Bitcoin Cash. In addition, the developers promise to decentralize mining, allowing Bitcoin Gold to be mined on video processors: mining will become available to a larger number of participants, and the influence of large companies will accordingly decrease.
“Bitcoin Gold will change the Proof-of-Work algorithm from SHA256 to Equihash, which will be ASIC-resistant and optimized for GPU mining,” explained Bitcoin Gold developer under the pseudonym The Sorrow.
Bitcoin Gold: what skeptics say
However, not everyone is en-to-zi-asm for the launch of Bitcoin Gold. Many people draw parallels with Bitcoin Cash and note that for the launch of cryptocurrencies in July, mi-ro-va-la is a much smaller network compared to the bit-to-i-na network, while its cost is only about 12 % of the hundred-and-most ori-ginal-no-th bit-to-i-na. So the cries see Bitcoin Gold as just another insignificant attempt to implement dis-integration in the community -stvo (especially learning that the Bitcoin Gold network will be even smaller than that of Bitcoin Cash, since so far only a small number of mines are under support). this project).
The details of what is hard-for-ka are still unknown. The Bitcoin Gold website only says that the project starts on October 25th. According to you, Bitcoin Gold has been working again with the pseudonym h4x, many new ones, for example, size block, still in the process of judgment.
“This will be a mi-ni-ma-li-sti-che-sky fork of the Bitcoin Core code base in the spirit of Litecoin, only with some con-serv-va-tiv-now- mi mo-di-fi-ka-tsi-ya-mi. Or-ga-niz-mom is useful when branches come from them. Bitcoin Gold’s goal is to perform ex-peri-ment and verify how applicable this principle is to the world of blockchain,” from-methyl h4x.
Pre-po-la-ha-et-sya that after a hard-for-ka the owners of tra-di-tsi-on-no-go bit-to-i-na will be able to get eq-vi-va-lent in Bitcoin Gold.
Pod-go-vi-la Ev-ge-niya Si-do-ro-va